Banking Law

Second Life Lesson: Investing Real Money in Pretend Bank Carries Risks

The virtual online world of Second Life has shut down about a dozen of its pretend financial institutions following complaints that they failed to pay promised returns on real money. Some players of the online fantasy game had been lured to invest real money based on promises of high returns,…

Jan 23, 2008 1:39 PM CST

Mortgage Lenders Cut Deals With Delinquent Debtors

Once upon a time, when borrowers couldn’t pay their mortgages, the banks who loaned money to them foreclosed. But today, faced with record-breaking foreclosure rates and a housing market in which a boarded-up bank-owned property can be very difficult to sell, even at a significant loss, lenders are rethinking the…

Jan 22, 2008 4:34 PM CST

BigLaw Masses Troops in Subprime Feeding Frenzy

A growing tsunami of investigations, class actions and bankruptcies resulting from the U.S. mortgage meltdown has created a business boom in some BigLaw practice areas. “Skadden, Arps, Slate, Meagher & Flom alone says it has roughly 100 lawyers across the firm working on subprime-mortgage fallout for clients such as Wells…

Jan 18, 2008 9:48 PM CST

Big U.K. Firm Breaks With Tradition, Takes Case Against Bank

In a tradition-breaking move that could soon be copied by other renowned “magic circle” law firms in London, Linklaters is helping a longtime client file suit against another financial institution. It is advising Barclays Capital in a major dispute with the U.S.-based Bear Stearns investment bank, with Lawrence Byrne, co-managing…

Jan 17, 2008 11:07 PM CST

Enron Shareholders Could Get Chance to Distinguish Stoneridge

The U.S. Supreme Court could decide as early as Monday whether to deny cert to Enron shareholders or return the case to an appeals court, giving an indication whether the suit against Enron bankers is doomed by the Supreme Court’s ruling yesterday in Stoneridge Investment Partners v. Scientific-Atlanta Inc. In…

Jan 16, 2008 3:38 PM CST

Bankruptcy Judges Question Countrywide Errors, Evidence

Bankruptcy judges are criticizing the business practices of Countrywide Financial, part of the legal headaches that Bank of America Corp. will be taking on when it acquires the troubled lender. Improper charges and suspect evidence have gotten the attention of judges overseeing the bankruptcies of Countrywide borrowers. The company is…

Jan 14, 2008 12:48 PM CST

Oops. Lost Passbook Costs Utah Lawyer Up to $832,000

Back in the day when a savings account required a passbook in which the bank manually entered each deposit and withdrawal, a client of Ogden, Utah, attorney George B. Handy established one that named Handy as trustee and deposited $150,000. Then the client died in a plane crash. More than…

Jan 11, 2008 11:00 PM CST

$4B BOA-Countrywide Deal Price Tag Doesn’t Include Legal Woes

Bank of America Corp.’s newly announced deal to buy Countrywide Financial Corp. likely could cost considerably more than the $4 billion purchase price. That’s because BOA is taking on a lengthy list of legal issues faced by Countrywide, the nation’s largest mortgage lender, as part of the deal, according to…

Jan 11, 2008 6:53 PM CST

Lawyer Says Subprime Suits Could Be ‘Bigger Than Enron’

A lawyer at a well-known British firm says a wave of lawsuits being filed over subprime mortgage issues could eventually exceed the scope of the litigation over the infamous Enron debacle. “In terms of the potential numbers of lawsuits, the subprime crisis could be bigger than Enron,” Tim House, an…

Jan 11, 2008 4:49 PM CST

Winston Lures Up to 18 Lawyers from N.C. Firm, Opens Charlotte Office

A 1,000-lawyer Chicago-based international firm is opening a Charlotte, N.C., office with six partners lured from a local firm, and expects to bring in a dozen more lawyers from the same firm soon. Six attorneys from 200-lawyer Kennedy Covington Lobdell & Hickman are to open the new Winston & Strawn…

Jan 11, 2008 12:55 AM CST

Judge Calls Countrywide ‘Re-Created’ Letters a Smoking Gun

A lawyer for a borrower being pursued by Countrywide Financial Corp. had a question: Why did a letter purportedly sent in September 2003 have an office address for him that he didn’t move to until after that date? The letter was one of three supposedly notifying the client of Kenneth…

Jan 8, 2008 5:44 PM CST

Baltimore Sues Bank for Lost Tax Revenue Due to Foreclosures

A lawsuit contends Wells Fargo Bank has cost the city of Baltimore needed tax revenues through subprime lending practices that led to increased foreclosures. The New York Times reports that other city lawsuits have tried to hold banks responsible for properties abandoned as the result of foreclosures, but this suit…

Jan 8, 2008 4:45 PM CST

State Street Corp. Readies for Lawsuits Related to Subprime Losses

State Street Corp. is reserving $618 million to fund legal and other costs after customer complaints that they were improperly exposed to investments in subprime mortgages. The CEO of the unit subject to the complaints, State Street Global Advisors, is being replaced, the Wall Street Journal reports (sub. req.). The…

Jan 3, 2008 3:43 PM CST

Subprime Problems Boost Securities Class-Action Suits

The subprime mortgage debacle is fueling an increase in shareholder class-action lawsuits. Two reports have reached that conclusion, despite some differences in the numbers reported. The New York Times reports that 198 class actions were filed through Dec. 15, an increase of 58 percent over last year, citing a study…

Dec 21, 2007 12:38 PM CST

Cyber Crime Does, Increasingly, Pay

Cyber crime has become more sophisticated, more stealthy, and more successful than ever before, as ill-intentioned Internet “malware” experts refine their methods to take advantage of the popularity of new technology and applications. In addition to sneaking their malicious software onto trusted high-traffic sites such as MySpace.com and YouTube.com, cyber…

Dec 21, 2007 2:39 AM CST